How Does the Use of Adjustable-Rate Mortgages Affect Interest-Rate Risk

question 36

Multiple Choice

How does the use of adjustable-rate mortgages affect interest-rate risk?

• A) It reduces the interest-rate risk of lenders.
• B) It reduces the interest-rte risk of borrowers.
• C) It reduces the interest-rate risk of both lenders and borrowers.
• D) It increases the interest-rate risk of both lenders and borrowers.

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Definitions:

Unethical

Actions or behaviors that are considered wrong or immoral according to societal or professional standards.

Initiations

The actions or ceremonies that mark the beginning of something, often used in the context of welcoming new members into a group or organization.

Scientific Analysis

The application of systematic, methodical approaches to investigate phenomena, acquire new knowledge, or correct and integrate previous knowledge.

Creative

Showing the ability or power to create through imagination or inventiveness.